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It’s easy to sit on our high horse and think, “Wow, luckily I’ll never make the same mistakes.” Don’t fool yourself. In the right circumstances, we all could repeat the same mistakes. Written into our genetic code is our propensity to follow the herd. Our susceptibility to fear. And our drive to make decisions based on social signaling of others.

Don’t get me wrong, these three traits are the reason why we are the dominant species on the planet, but when it pertains to investing in these traits can take us out of the game.

So we tell ourselves, “don’t be a sheep,” but we are kidding ourselves because deep down we are sheep. The question is, will you be a sheep or sheeple?

The difference between sheep and sheeple:

Sheep: They unquestioningly follow the herd. Their investment decisions they are tied to social conventions. They assume others are making investment decisions based on sound research, but the sheep fail to question why the herd is making a particular decision. The sheep know what they want to hear and will find someone to tell them what they want to hear so when things go back the sheep have someone to blame.

What makes a Sheeple?

A Sheeple realizes we are hardcoded for Sheep thinking, but a Sheeple can occassionally check their Sheeple tendencies.

Sheeple: When a Sheeple hears about someone’s investment strategy, the Sheeple asks the person how they have reality tested their assumptions. A Sheeple realizes that before entering an investment, they must write down their plan for staying in and exiting the investment to prevent themselves from being tricked by the crowd. A Sheeple questions the absolute confidence in other investors and perks their Sheeple ears up when someone lacks doubt in their investment strategy.

The difference between Sheep and Sheeple can be seen in Type 1 and Type 2 thinking. Sheeple thinking takes a lot of cognitive effort while sheep thinking is done nearly by default. Maybe that’s why most of us don’t think like Sheeple on a regular basis? And therein lies why Sheeple thinking is valuable because most people aren’t doing because it’s so cognitive demanding.

“I took this data back to 1900 but inflation was more or less nonexistent until the 1940s. In fact, total inflation from 1871-1939 was around 13% (or just 0.2% per year). From 1940 through today it’s been well over 1600% (or around 3.8% per year).

You also have to take into account how mature the economy is when considering the historical track record of interest rates. William Bernstein touched on this idea in his book The Birth of Plenty:

Interest rates, according to economic historian Richard Sylla, accurately reflect a society’s health. In effect, a plot of interest rates over time is a nation’s “fever curve.” In uncertain times rates rise because there is less sense of public security and trust. Over the broad sweep of history, all of the major ancient civilizations demonstrated a “U-shaped” pattern of interest rates. There were high rates early in their history, following by slowly falling rates as the civilizations matured and stabilized. This led to low rates at the height of their development, and, finally, as the civilizations decayed, there was a return of rising rates.”

Buying – Figuring out what you should buy and what you should not buy. There are many strategies that work here but my favorite is buying things that others are not buying. And my preferred reason for “others not buying” is that they don’t know about it yet.

Community bank and mortgage lender HomeStreet is closing several offices and laying off more than 100 staffers, due to a lack of demand for its mortgage products. CEO Mark Mason announced the cuts in a second-quarter earnings call with analysts and investors. Here are the full details of those actions: “Given the persistent shortage of new and retail housing and increased interest rates, reducing demand for both purchase and refinanced mortgages, along with recent decrease in our composite margins, we took additional steps in the …

Progressives praise California as the harbinger of the political future, the home of a new, enlightened, multicultural America. Missouri Senator Claire McCaskill has identified California Senator Kamala Harris as the party leader on issues of immigration and race. Harris wants a moratorium on construction of new immigration-detention facilities in favor of the old “catch and release” policy for illegal aliens, and has urged a shutdown of the government rather than compromise on mass amnesty.

College graduation has come and gone. That said, many recent graduates still find themselves uncertain as to what they should do next in life. While specific, personal answers might be hard to come by, these 16 cartoons will give you the advice you need to find them.

“The law professors June Carbone and Naomi Cahn described in a 2010 book how red and blue families were living different lives. The biggest differentiating factor, they said, was the age that mothers had children. Young mothers are more likely to be conservative and religious, to value traditional gender roles and to reject abortion. Older mothers tend to be liberal, and to split breadwinning and caregiving responsibilities more equally with men, they found.”

Multiple best selling author and financial strategist Michael Mauboussin shares his wisdom on parenting, daily routines, reading, and how to make better decisions.

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